VMware Bets On Hyper-Converged Data Centers For Future Growth

Company wants to 'build bridges' between the data center and the public cloud, COO says

People pass VMware Inc.'s display before the Mobile World Congress in Barcelona in February.
Photo:
Getty Image/AGence France-Presse/Lluis Gene

VMware Inc., whose server virtualization technology helped spark the cloud computing phenomenon, is now looking to so-called hyperconvergence for future growth, and to its new relationship with Dell Technologies, for help.

VMware has nearly doubled revenues in the last five years, growing from $3.8 billion in 2011 to $6.6 billion last year. EMC Corp. had a controlling stake in the company until Dell closed its $60 billion acquisition of EMC in September. VMware remains a publicly traded company, but now with access to Dell’s resources, said Sanjay Poonen, chief operating officer at VMware.

Mr. Poonen, who joined VMWare in 2013 from SAP SE, described the company’s vision as helping “build bridges” between the data center and the public cloud and to the end user through better mobile tools. Serving enterprise mobile users is an effort it began in earnest in 2014, with the acquisition of mobile device management company AirWatch.

The company sees the hyper-converged data center as part of that bridge-building and an extension of VMWare’s original mission. In a hyper-converged setup, storage, computing and networking capabilities are integrated and handled largely by software, rather than hardware. The “single box” can save CIOs from having to buy separate components to integrate manually, Mr. Poonen told CIO Journal Monday. Managing a unified system through software also lets CIOs make changes, such as adding storage space, more easily and less expensively than performing the same changes on individual pieces of hardware and software.

There is competition in the market for hyperconverged infrastructure, as companies look to cut costs and develop new capabilities.

As Arun Chandrasekaran, a Gartner Inc. analyst, told the WSJ’s Don Clark in September, a selling point for hyperconvergence is that users can add a box as storage needs grow, avoiding the need to employ storage specialists or buy hardware in advance to take care of future needs.

Virtualizing storage and networking can “change the economics” of enterprise computing the same way virtualizing servers brought on more economical cloud computing, Mr. Poonen said.

VMware is part of complex group of businesses that was created by Dell’s acquisition of EMC. “Dell, which is privately held, purchased not only EMC but its Byzantine federation of wholly and partially owned subsidiaries,” the WSJ reported in September. “Those include cybersecurity firm RSA Security LLC, software-development company Pivotal Software Inc., cloud-software company Virtustream, and virtualization software vendor VMware, which will remain public.”